|Samuel R. Berger,
George Muñoz, and George Soros|
Launch of Southeast Europe Equity Fund
Press Release, Overseas Private Investment Corporation
Washington, DC, July 26, 2000
Samuel R. Berger, Assistant to the President for National Security Affairs, George Muñoz, President and CEO of the Overseas Private Investment Corporation (OPIC), and George Soros, organizer of Soros Private Funds Management (SPFM), today launched the Southeast Europe Equity Fund, a $150 million fund to provide new business development, expansion, restructuring, and privatization in the region.
At a ceremony in the Old Executive Office Building at the White House marking the one-year anniversary of the Stability Pact for Southeast Europe, Muñoz and Soros signed an agreement on basic terms under which SPFM is prepared to manage, and OPIC is prepared to provide financing for, the fund.
"A year ago, after NATO won the war in Kosovo, more than 40 leaders came together in Sarajevo determined to win the peace," Berger said. "With the Stability Pact Summit, we launched a new partnership between Southeast Europe and the international community to reverse the habits of history, de-Balkanize the Balkans and work toward a peaceful and stable region. We made clear that the nations of Southeast Europe must undertake reforms to attract investment, and that they must work together. Our efforts are working."
Berger noted that economic growth is accelerating throughout the region and that the OPIC fund is one of a number of steps the United States has taken over the past year to promote trade, investment, and economic growth in Southeast Europe, as promised by President Clinton at the Stability Pact Summit Pact last July. Berger said the United States will continue to provide strong support, particularly for initiatives to strengthen democracy and create sustainable economic growth.
Muñoz said, "I am pleased that we are taking another significant step in demonstrating that Southeast Europe is an important region on which we should focus our efforts, to enable it to rebuild and enter the global marketplace as a full partner. The Southeast Europe Equity Fund is an ideal vehicle to connect American institutional capital with European entrepreneurs eager to help Americans tap their growing markets. OPIC is pleased that Soros Private Funds Management has chosen to send a strong, positive signal that Southeast Europe is open for business."
Soros said, "After all the horror and destruction wrought by the Milosevic regime, the United States and the European Union are deeply committed to ensuring a better future for the region. This creates investment opportunities and private investment in turn can make an important contribution to the region. OPIC is rendering a real service by providing financing for this fund and I am happy to put my money where they are putting theirs."
Congressman Benjamin A. Gilman (R-NY), Chairman of the House International Relations Committee, said, "I am very pleased that this new fund of the Overseas Private Investment Corporation will be able to play a key role in mobilizing private sector support for the future development of Southeast Europe. The Fund's creation is as much a recognition of the importance of this region's vibrant new markets for U.S. products as it is a reflection of our long-term support to its emerging market economies. With the financial commitments of the Fund's management team already in place, it should quickly be able to raise the capital needed to promote those projects demonstrating the best corporate governance practices."
The fund will serve Albania, Bulgaria, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Romania, Slovenia, Montenegro, and Turkey -- an emerging consumer market of 112 million people. Its primary purpose will be to provide capital for new business development, expansion, restructuring, and privatization.
Soros Private Funds Management was selected as fund manager by the OPIC Board of Directors in June, concluding a transparent, seven-month selection process by OPIC management. A Soros affiliate will commit $50 million in private equity, while OPIC will commit to provide a $100 million loan guaranty. Interests in the fund will not be offered to the public.
OPIC currently provides more than $65 million in financing and insurance for projects in Bulgaria, Croatia and Romania. Other OPIC-supported funds have invested more than $30 million in the region.
"OPIC has taken a leadership role in responding to the Clinton Administration's Southeast Europe initiative to stabilize and integrate the countries of southeast Europe into the transatlantic community," Muñ*oz said. "OPIC opened a southeast Europe regional office in Zagreb last February, to serve as a focal point for establishing potential joint venture partnerships between U.S. and regional businesses. We will continue to support and encourage U.S. investment in the region."
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